Author: Ivanhoff

MarketSurge powers the charts in this video.

The downtrend continues. Every slight bounce is getting faded. SPY and IWM have now been rejected near their declining 10-day moving average multiple times in the past couple of weeks. QQQ was rejected near its declining 20dma and closed below its 200dma. This is the definition of a steep downtrend.

In the meantime, energy prices are holding a bid. XLE keeps making new highs. The market doesn’t believe the promises for a short war anymore.  Words are not enough when a reputation has been tarnished. Now, it wants action. 

The Fed kept interest rates the same. Why should they cut them? Inflation numbers are coming way above estimates. Crude oil, gas, and fertilizer prices staying near their highs will only elevate inflation expectations. No wonder why Treasuries are getting hit, too. The Fed might be able to control the yield on the short end of the curve, but it can’t on the long end – the market decides how much it will pay. The last time both equities and Treasuries declined together was in 2022.

The silver lining of the current correction is that it can easily highlight future winners. Last week, we saw fiber optic and memory chip stocks shine amid the selloff. If something doesn’t fall when the general market is dropping, it is probably getting accumulated. This doesn’t mean buy them now. If the indexes accelerate lower, everything will be hit during panic selling. If you buy too early, you will be stopped. All of those stocks could easily test their rising 50 and 200dma in a steep market correction, and they are a long way from there. Just look at PLTR and HOOD in March-April of 2025, when they dropped about 50% and are still staying above their rising 200dma. I still think that we haven’t really seen any real panic selling, which is required by definition for a sustainable bottoming process.

Sign up for my premium service to read the rest of my market view and ideas.

My subscription service includes a Discord room and private X feed with options and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. See how my ideas/alerts performed.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only, and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

The indexes continue to chop in a range. If we zoom out a bit and look at weekly charts, we can clearly see that bears are in control – the indexes are making lower highs, every rip to their declining 10 and 20-week moving averages is getting sold. Long swing ideas are much less likely to work in this environment. They only work for a day or two, and then there’s a violent reaction in the opposite direction. Short ideas work better if you wait for low-volume bounces near potential resistance, like a 20, 50, or 200-day moving averages. Shorting is not easy, even during corrective markets, because they are extremely volatile and change direction often. It is a hard penny environment for now.

All eyes are on crude oil. Despite heavy government intervention, crude oil futures are holding a bid near $100. The price of physical barrels in Dubai is $140. Those two prices are typically very close to each other. If crude oil continues its ascent, the stock market indexes will accelerate lower. South Korea is already down 20%, Japan, Europe, and the US small caps are down about 10%. The Nasdaq 100 is barely down 7% from its all-time highs. We haven’t really seen any real panic selling yet, and I don’t know if we will. The longer the Strait of Hormuz stays closed, the bigger the pressure will be on nations to find a peaceful resolution.

Sign up for my premium service to read the rest of my market view and ideas.

My subscription service includes a Discord room and private X feed with options and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. See how my ideas/alerts performed.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only, and it should not be considered financial advice. Read my full disclaimer here.

MarketSurge powers the charts in this video.

Crude oil has almost doubled in a little over a week since the war in the Middle East started, and the stock market is starting to take it seriously. South Korea, Japan, and Europe are down 15-20% in the past week. Small-caps Russell 2000 (IWM) is down almost 12% since its all-time highs.

Financial markets are currently in a risk-off mode. Sometimes, risk off means a mean reversion. We saw it last week. Leaders went down, laggards jumped. South Korea, Europe, Japan, emerging markets, small caps, semiconductors, healthcare, and industrials broke down. Software showed incredible relative strength all week – either the market believes it overreacted to the downside and is correcting its recent behavior, or trend-following funds were forced to cover their shorts to reduce risk. Not surprisingly, energy and defence stocks also gained last week.

If this correction continues, the next stage is panic selling, when everything goes down fast. This is what creates the opportunities down the road. The phase after that is bullish divergences – when the indexes keep making new lows but select growth stocks make a higher low and build new bases. These would be the future leaders that could double and triple during the next bull run. 

Sign up for my premium service to read the rest of my market view and ideas.

My subscription service includes a Discord room and private X feed with options and stock ideas, emails with concise market commentary, real-time market education, the Momentum 40 list of market leaders, and much more. See what subscribers say about my educational service.

Check out my free weekly email to get an idea of the content I share with members. See how my ideas/alerts performed.

You can find my trading books on Amazon here.

Disclaimer: Everything I share is for educational and informational purposes only, and it should not be considered financial advice. Read my full disclaimer here.